A linear demand function exhibits:
A. more elastic demand as output increases.
B. constant demand elasticity.
C. less elastic demand as output increases.
D. insufficient information to determine.
Answer: C
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A major reason for creating the European Monetary System was to
A) create a single currency. B) unify banking laws and permit cross-border investment. C) avoid competitive devaluations. D) reduce the costs of changing currencies. E) eliminate the need for central banks.
If the supply of health-care services is highly inelastic and larger government subsidies lead to an increase in the demand for the services,
a. the prices of health-care services will rise by only a small amount, but the quantity supplied will increase substantially. b. the prices of health-care services will rise substantially, but the quantity supplied will increase by only a small amount. c. both health-care prices and the quantity of the services supplied will increase substantially. d. the prices of health-care services will decline, but there will be only a small change in the quantity supplied.
If supply decreases along a given demand curve,
a. an excess quantity demanded will be created, increasing the equilibrium price and causing equilibrium quantity to fall b. an excess quantity supplied will be created, lowering the equilibrium price and causing equilibrium quantity to rise c. an excess quantity demanded will be created, raising the equilibrium price and quantity d. an excess quantity supplied will be created, lowering the equilibrium price and quantity e. price will fall, shifting the demand curve outward, raising the equilibrium quantity
The knowledge and skills people accumulate through experience, education, and training is called
A) physical capital. B) human capital. C) economic investment. D) spillover benefits.